Tag: Real estate legal services Kenya

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real estate

Conveyancing and Real Estate

Conveyancing Law and Practice in Kenya

With years of experience in land law and property transactions across Kenya and the broader Eastern Africa region, our firm is well-equipped to handle all aspects of property law. Our expertise covers land and property acquisition, management, and disposal, ensuring our clients receive strategic and practical advice tailored to their specific needs.

Expertise in Conveyancing & Real Estate in Kenya

Our Conveyancing & Real Estate practice group has extensive experience in advising both local and international clients on various property-related matters. We specialize in:

  • Land Acquisition and Disposal: Providing expert guidance on acquiring and selling land in Kenya.
  • Conveyancing: Handling the entire conveyancing process, including drafting conveyancing documents and managing the legal transfer of property.
  • Commercial & Residential Development: Advising on development projects, including project financing and joint ventures.
  • Leases and Licenses: Structuring and drafting lease agreements for both commercial and residential properties.
  • Project Financing: Offering solutions for financing real estate projects, ensuring compliance with legal requirements.

Understanding the Conveyancing Process in Kenya

Navigating the conveyancing process in Kenya requires careful attention to detail. We assist clients with:

  • Conveyancing Documents: Drafting and reviewing all necessary documents to ensure a smooth transaction.
  • Completion Documents: Ensuring that all required documents are completed and properly executed.
  • Off-Plan Conveyancing: Managing transactions for properties that are yet to be fully developed, ensuring that clients’ interests are protected.

Avoiding Pitfalls in Land and Property Transactions in Kenya

Our guide helps you avoid common mistakes when buying land or property in Kenya:

Don’ts:

  • Avoid Sending Money Directly to the Seller: Always route payments through your advocate to ensure a proper money trail.
  • Don’t Bypass Legal Advice: Involve a qualified advocate in all transactions to avoid legal pitfalls.
  • Don’t Rely Solely on Adverts: Conduct thorough due diligence, including background checks on sellers.

Do’s:

  • Conduct a Site Visit: Verify the land’s condition with a physical visit or through your power of attorney.
  • Engage a Surveyor: Have a qualified surveyor mark the land boundaries.
  • Keep Written Records: Document all agreements and conversations in writing for future reference.
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real estate

How Can a Foreigner Own Property in Kenya?

How Can a Foreigner Own Property in Kenya?

Understanding Property Ownership for Foreigners in Kenya

For foreigners looking to invest in property in Kenya, it’s essential to understand the legal framework governing land ownership. Under the Constitution of Kenya (2010), the Lands Act (2012), and the Land Registration Act (2012), foreigners can own property but with certain restrictions. This article will clarify how foreigners can acquire property, the limitations in place, and common pitfalls to avoid.

Limitations on Property Ownership in Kenya for Foreigners

Foreigners can own property in Kenya only under leasehold tenure, with a maximum lease term of 99 years, as outlined in Article 65(1) of the Constitution. Any lease beyond 99 years is automatically considered a 99-year lease. Additionally, companies are regarded as Kenyan only if they are 100% owned by Kenyan citizens. Companies with foreign shareholders are classified as foreign entities and cannot own freehold land. Trusts cannot bypass these regulations, and any freehold interest held by a foreigner will revert to the state, which will grant a 99-year lease at a nominal rate.

Agricultural Land Ownership for Foreigners

According to the Land Control Act, transactions involving agricultural land are categorized as “controlled transactions” and require consent from the Land Control Board. This board cannot authorize sales, leases, or transfers of agricultural land to foreigners. However, foreign investors can apply for exemptions through a presidential notice in the Kenya Gazette. Public companies with foreign shareholders may also acquire agricultural land under specific conditions.

How to Avoid Legal Pitfalls When Acquiring Property as a Foreigner

Some foreign investors attempt to bypass ownership restrictions by using local shareholders or nominees. These strategies often lead to legal complications. It’s crucial to consult a legal expert to ensure full compliance with Kenyan law.

Types of Property Ownership in Kenya

  1. Public Land: Owned by the government for public use (e.g., national parks, public infrastructure) as defined in Article 62 of the Constitution.
  2. Community Land: Held by communities based on ethnicity or common interests, intended for communal benefit (as per Article 63).
  3. Private Land: Owned by individuals or entities under freehold or leasehold tenure (according to Article 64). Freehold land grants absolute ownership, while leasehold land is held for up to 99 years.

When purchasing property, it is essential to verify that the land is not listed in the Ndung’u Land Report, which records illegally acquired land.

Who Can Sell Property in Kenya?

Property in Kenya can be sold by:

  • Private developers
  • Licensed estate agents and brokers
  • Saccos, churches, and Chamas
  • Cooperatives and financial institutions
  • Trusts, companies, individuals, and communities

Recent Changes in Property Ownership Laws: The Sectional Properties Act 2020

The Sectional Properties Act 2020, in alignment with the Constitution of Kenya 2010, facilitates the division of buildings into individually owned units, with shared common property. This law streamlines property transactions, reduces costs, and enhances protection for unit owners.

Tax Implications When Acquiring or Selling Property in Kenya

  • Stamp Duty: The buyer is required to pay stamp duty, which is 4% for properties in cities and municipalities and 2% for properties in rural areas.
  • Capital Gains Tax (CGT): Sellers must pay a 15% CGT, effective from January 1, 2023, on the transfer of property, land, buildings, securities, and shares.
  • Value Added Tax (VAT): Commercial building sales are subject to VAT at 16%.
  • Miscellaneous Costs: Include loan-related bank fees and mobile money transfer charges.

Legal Assistance for Foreigners Buying Property in Kenya

At WKA Advocates, we offer a dedicated Conveyancing and Real Estate department to assist foreign investors. Whether you’re purchasing residential, commercial, or agricultural property, our team provides comprehensive legal guidance to ensure a smooth transaction.

Contact Us:

  • Email: info@wka.co.ke
  • Website: wakilihub.co.ke/
  • Phone: +254 798 03 580
  • Address: Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road, Nairobi

Authors:

William Karoki, Founding Partner, WKA Advocates